Annulment to the Memorandum of Association of a joint liability company in the UAE

A memorandum of association for a joint liability company is the primary document that lays down the establishment of a company. As soon as the owners sign the memorandum of association of a joint liability company in the UAE, they are supposed to follow the obligations laid down in the document. However, there might be certain factors that may lead to the annulment of the memorandum of association of a joint liability company in Dubai once it has been made and implemented. Annulment here means that the document is not applicable anymore and the subscribers will not be able to access the rights or perform the duties laid down as per the document. 

In this article, we will be discussing the situations in which the annulment of MOA of a joint liability company happens and how the Notary public Dubai plays its part if such a situation arises.

Situations causing annulment to the MOA of a joint liability company in the UAE

Certain factors can cause the annulment of a memorandum of association of a joint liability company in Dubai. These factors usually point that the legal document is against a public policy and there has been some miscommunication with the contract by the subscriber.

These factors and situations have been described below

  1. Uncertainty– in a situation where the memorandum of association creates uncertainty with respect to the obligations mentioned in the contract, then it may be subject to annulment. For example, the agreement is agreed to within the memorandum of association may create uncertainty as there is no clear indication as to what is being agreed to.
  2. Defective or incomplete MoA– A memorandum of association is incomplete if it is missing certain important and mandatory clauses or terms and conditions. Important terms and conditions are the ones that make the memorandum of association legal and enforceable by the law. The absence of the same makes the document not acceptable and hence makes the document annulled. Some of the important terms and conditions that make the MoA for a joint liability company in Sharjah enforceable include the clauses specifying the date of incorporation and the agreed capital investment clause.
  3. The mistake that stands common– when the subscribers of the MoA are mistaken for a certain subject matter in the legal document, then the MoA stands annulled or void. As an example, if a subscriber has promised to put in a certain amount of investment and also files for bankruptcy at the same time, then in this situation the annulment of the MoA occurs because of a common mistake that has happened.
  4. Lack of capacity– the shareholders of a company in a joint liability company are supposed to be having their full mental capacity while they are signing the memorandum of association. They have to be fully understood the terms and the conditions mentioned in the legal document. In case the Notary Public Dubai at the time of notarization finds either of them lacking their mental capacity, then the MoA will stand void. The lack of mental capacity here refers to being underage or possessing any mental disorder.
  5. Unlawfulness– A memorandum of association stands annulled or void if the activity mentioned in it is illegal or unlawful. It could be an MOA with terms and conditions that are directly unlawful to the laws of the land like unfair contract terms as covered by the UAE commercial companies’ law.
  6. Government Policies– A memorandum of association in the UAE stands automatically cancelled in case the subject matter of the contract is against any public policies. If the scope of work of a company is against the rules and policies set by the UAE government. As an example, if a company involves slavery in its commercial activities and lists that in the MoA then these kinds of MoAs get cancelled and void by default.
  7. Unclear terms– in cases where an MOA has been signed and the person signing the MOA is not able to execute his duties as per the terms mentioned in the MOA due to his incapacity, under such situations, MoA stands annulled or cancelled. In such cases, the memorandum of association will be applied for annulment with the local authorities as the obligation will be impossible to be fulfilled by the shareholder or the subscriber.
  8. Lack of consideration– A memorandum of association of a joint liability company in Sharjah must have clear objectives stated for all the shareholders who are involved with some sort of examples. For example, a shareholder may not agree to do something which he has already done or something which he is already required in doing legally.
  9. Cheating– The Memorandum of Association of joint liability companies in Dubai stands cancelled if one of the subscribers makes the other subscriber sign the document by hiding some facts or concealing some information. In such a case, the MOA is annulled or cancelled as it has been formed and signed by cheating.
  10. Casual alterations after the MoA has been printed– crossing out the mistakes, putting white fluids, or writing initials may be acceptable for formal documents, but in the case of legal documents, these kinds of alterations are not acceptable. Similar is the case for the memorandum of association of a joint liability company in Abu Dhabi. Even if these mistakes are honest with the information given accurately, they cause a space for suspicion. If an MOA has been altered, then it is likely that it will get annulled or void by the Notary Public Dubai. In case there are any changes that are to be made to the already drafted Memorandum of association for a joint liability company in Dubai, then it is advised to rewrite the same from scratch.

 Read More – How to Draft a Memorandum of Association for a Company

How to get an annulment to the MOA of a joint liability company in Dubai attested by the Notary Public Dubai?

A Memorandum of Association of a joint liability company in UAE along with its annulment must be notarized by the Notary Public Dubai for it to get authenticated and enforceable by the law. This also required the presence of 2 witnesses and all the shareholders should be present and sign the document in full mental capacity. Do get in touch with us in case you want to get your MoA notarized by us.